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CFP Mock Test Risk Management and Insurance Planning

CFP Mock Test Risk Management and Insurance Planning

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Published by Deep Shikha
Roots Institute of Financial Markets is an advanced research institute established by Roots Financial Planners. Mrs. Deep Shikha Malhotra, CFPCM is the promoter of the venture, having 11 years experience in the field of Education and Training and having 4 years experience in Financial Planning, who is the founder of Roots Institute of Financial Markets (RIFM). RIFM specializes in Financial Market Education and Services. RIFM is introducing Stock Market Courses of NSE and BSE and short-term training programs and Financial Planning Courses for providing state-of-the art facilities in the field of Financial Markets and Financial Planning. RIFM train personals like FMM Students, Dealers/Arbitrageurs, Financial market Traders, Marketing personals, Research Analysts and Managers.
Visit us at
www.rifmindia.com
www.rifmindia.wordpress.com

Roots Institute of Financial Markets is an advanced research institute established by Roots Financial Planners. Mrs. Deep Shikha Malhotra, CFPCM is the promoter of the venture, having 11 years experience in the field of Education and Training and having 4 years experience in Financial Planning, who is the founder of Roots Institute of Financial Markets (RIFM). RIFM specializes in Financial Market Education and Services. RIFM is introducing Stock Market Courses of NSE and BSE and short-term training programs and Financial Planning Courses for providing state-of-the art facilities in the field of Financial Markets and Financial Planning. RIFM train personals like FMM Students, Dealers/Arbitrageurs, Financial market Traders, Marketing personals, Research Analysts and Managers.
Visit us at
www.rifmindia.com
www.rifmindia.wordpress.com

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Published by: Deep Shikha on Feb 08, 2010
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07/06/2013

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Roots Institute of Financial Markets RIFM1197, NHBC Mahavir Dal Road Panipat 132103, HaryanaPh No. 99961-55000, 99964-55055, Web:www.rifmindia.com, email: info@rifmindia.com
CFP Mock Test Risk Management and Insurance Planning
1) Corporate agent can represent ___________. (1)
A)
Only corporate insurance company
B)
Multiple insurance companies
C)
Only one insurance company
D)
Can obtain business only from corporate2) A catastrophe is not likely to be insured because ______. (1)
A)
It violates the principle of sharing of losses
B)
It violates the principle of insurable interest
C)
Insurance companies may not be having capital to handle losses of such magnitude
D)
Catastrophes are very much insurable through good product design3) Insurance contracts are __________. (1)
A)
Same as commercial contracts
B)
Governed by Regular Contract Act as well as Insurance Contract Act, 1999
C)
Different from regular contracts and is regulated by Insurance Contract Act 1999
D)
Similar to regular contracts, but have many distinct differences, with own set of principles
4) In India, statutory trust insurance policies are normally created pursuant to ____________. (1)
A)
Estate Duty Act
B)
Section 6 of the Married Women
.
s Property Act, 1874
C)
Charity Commissioner
D)
Indian Insurance Act, 19385) The Insurance Act, 1938, in respect of insurer obligations to the rural and social sector provides _____. (1)
A)
Specific obligations for the rural sector and general obligations for the social sector
B)
Specific level of obligations to be met in these sectors for life insurers
C)
Specific obligations to be met in these sectors for all insurers
D)
Broad directional guidance to focus on these sectors6) Ram needs to decide on taking insurance of his property against fire and other perils. This decision should dependon ____________. (1)A) Age of the propertyB) His ability to pay premiumC) The prevalent standard practice
D) His inability to afford financial consequences of self insurance
7) Postal Life insurance is open only for employees of __________. (1)
A)
Central and State government / P&T department
B)
all Central and State Government Departments, Nationalized Banks, PSU, Financial Institutions, Local Bodies,Educational Institutions aided by the Government etc.
C)
Nationalized banks / PSUs / Zila Parishads etc
D)
None of the above8) Insurable liability in case of 3rd party liability insurance risk is best defined as: (2)
 
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Roots Institute of Financial Markets RIFM1197, NHBC Mahavir Dal Road Panipat 132103, HaryanaPh No. 99961-55000, 99964-55055, Web:www.rifmindia.com, email: info@rifmindia.com
A)
The risk that confronts every person or business from negligence.
B)
The risk that confronts every person or business from a public wrong.
C)
The risk that confronts every person or business resulting from intentional or unintentional behaviour thatCould result in the injury of another person or damage to property.
D)
The risk that confronts every person or business resulting from intentional behaviour that could result in theinjury of another person or damage to property.9) (A) In level term insurance policies, the coverage remains constant throughout the term.(B) The premium payable in level term insurance policies can remain same or increase with increase in insured
.
sage. (2)
A)
(B) is correct
B)
Neither (A) nor (B) are correct
C)
Both (A) & (B) are correct
D)
(A) is correct10) Which of the following statement is false about warranty in an insurance contract?(A) Declarations on the proposal form can be warranties by reference.(B) Warranties help the insurer to ensure that the risk stays the same during currency of the policy.(C) Warranties have to be followed literally. (2)
A)
(A)
B)
(B)
C)
(A), (B) & (C)
D)
None of the above
11) An insurance firm has to create and sell a policy to cover the risk of partial disability to workmen in a chemicalFactory. Which of the following is not a relevant factor in pricing the policy? (2)
A)
The ability of the insurance firm to deploy the premium and earn positive investment returns on the funds.
B)
The ability of the workmen to bear the cost of the policy.
C)
The extent of probable disability created due to the work environment and its impact on workmen
s earningCapability.
D)
The willingness of the management of the firm to bear part of the costs of the premium.12)Sajid has a pension policy details of which are given as under; 28 year PPT; Non Participating policy; YearlyPremium Rs. 10,000; guaranteed returns of Rs. 50/1,000 SA; SA during accumulation phase Rs. 3 Lakh; No riders.What will be the value of the accumulated corpus just on completion of the premium paying term? (4)
A)
Rs. 5.58 Lakh
B)
Rs. 4.80 Lakh
C)
Rs. 4.20 Lakh
D)
Rs. 7.20 Lakh13)Suryakant has an accident insurance policy which pays TPD benefit of Rs. 3,000 per week, for up to 104 weeks.He meets with an accident and is disabled and bedridden for 6 months. He has available leave of 4 weeks, afterWhich he is on loss of pay. What benefit amount will he get from the insurance company? (4)
A)
Rs. 66,000
B)
Rs. 72,000
C)
Rs. 60,000
D)
Rs. 78,000
 
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Roots Institute of Financial Markets RIFM1197, NHBC Mahavir Dal Road Panipat 132103, HaryanaPh No. 99961-55000, 99964-55055, Web:www.rifmindia.com, email: info@rifmindia.com14) Ram had taken an endowment plan for 35 years on 20/05/1990 for a sum assured of Rs. 2.5 lakh, wherein premiumPayable is Rs. 2,000 quarterly. He dies on 18/08/2006. Quarterly premium due in August 2006 was paid on06/08/2006. Bonus vested: Rs. 1, 44,000, Interim Bonus declared after valuation on 31/03/2005 is Rs. 68 perThousand. What is the amount of claim payable under the policy? (4)
A)
Rs. 4, 11,000
B)
Rs. 4, 07,000
C)
Rs. 3, 57,600
D)
Rs. 3, 54,600
15. Insurable liability in case of 3rd party liability insurance risk is best defined as: 1A risk that confronts every person or business resulting from intentional behavior that could result in the injury of another person or damage to property.B The risk that confronts every person or business resulting from intentional or unintentional behavior that couldresult in the injury of another person or damage to property.C The risk that confronts every person or business from a public wrong.
D The risk that confronts every person or business from negligence.
16. Actual cash value, replacement cost, depreciation are taken into consideration to _________. 1
A Measure potential loss
B Calculate rate of premiumC Manage riskD Assess severity of loss17. LALGI is _________. 1A Private insurance
B Social insurance
 C Public benefit guarantee schemeD Actuarial technique of determining insurance premium18.For risk to be insurable which one of following is not correct? 1A The loss must not be catastrophic.B The loss must be fortuitous or accidental.C The loss produced by the risk must be definite and measurable.
D There must be a sufficiently large number of heterogeneous exposure units to make the losses reasonablypredictable
.19.NEED-BASED approach for calculating life insurance requirement does not take into consideration thefollowing _______. 1A Existing life insurance policies
B Future unknown expenses
 C Current expensesD Current investments20 If the life insurance policy is endorsed under MWP Act, 1874 then ________.1

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